If you are employed, working in a company, then you must have heard about TDS and if your salary of the month is good, then TDS will be deducted from your salary every month, sometimes you must have thought that TDS What happens, why it is deducted from your salary every month,
What is TDS
Friends government two types of run us Country Tax picks, Indirect Tax and Direct Tax , similar government serviceman logo TDS one take, which Indirect Tax is saying in other words, TDS is a tax, which funds government Goes, according to the current rules of the Government of India, if your annual income is more than 2.5 lakh rupees, then it is compulsory for you to pay TDS ,
Also Read: Filing IT Returns: Process To Check The Validity of Form 16 Or TDS Certificate
By annual income, we mean from the financial year which is in our country from 1 April to 31 March , if your income is more than 2.5 lakh rupees in a financial year, then TDS will be deducted from your salary, TDS is the full form – Tax deducted at source, which in Hindi means to deduct tax at source, hence TDS is called Indirect Tax, because it is deducted from your monthly salary by the company.
Why is TDS deducted?
Friends, every person living in this country gives tax to the government in the form of Direct or Indirect , so TDS is also one of the taxes that the government takes from us, now why TDS is deducted, we can understand this way,
To run our country, to provide basic amenities to the people, the government needs money to implement new roads and public welfare schemes, so the government takes that money from us as tax, The possibility of tax evasion in TDS is very low because this tax is deducted directly from your monthly salary.
What are the things in which TDS is deducted?
TDS is deducted on a variety of payments, such as the salary you receive every month, the dividend received by the company listed in the stock market , any kind of commission, rent, brokerage TDS is deducted on (Brokerage), Contract Payments, Lottery etc.
TDS is deducted by Any institution which comes under the purview of TDS has to pay TDS, by which TDS is paid, it is called Payer and deductor, and the person who gets payment after deducting TDS is called Deductee.
For example, if you are working in a company and TDS is deducted by your company from your salary, then you become a deductee and your company is a deductor,
Now it is the responsibility of your company to deduct your TDS and deposit it in the government account, the Deductor also has to give TDS certificate to the Deductee on the deducted TDS, so that we know in the name of Form 16 / 16A, in which it is said That your TDS has been deducted and credited to the Government account by the Deductor
How much TDS do you have to pay on salary?
How much TDS you will have to pay, the answer to this question is hidden in the income slab, let us explain to you the income slab, in the budget of 2020 our government had provided that if the taxpayer wants to according to his income tax slab rate of 2019 Can pay tax or if he wants, he can pay his tax according to the changed income tax slab rate of 2020, here we have told about income tax slab according to 2020-21
Apart from this, if your annual income is more than 50 lakhs, then you also have to pay surcharge , which is as follows,
- 10% of Income Tax – If your income is more than 50 lakhs and less than 1 crore.
- 15% of Income Tax – If the income is more than 1 crore.
- 25% of income tax – if the total income is between 2 crores to 5 crores.
- 37% of income tax – if the total income is more than 5 crores
Health and Education Cess:- 4 % on Income Tax + Surcharge
Note: According to the slab given above, your TDS will be deducted and you will also have to pay your education and education cess in TDS, and if your annual income is more than 50 lakhs, then you will also have to pay surcharge.
How is TDS calculated?
You must have understood from the slab rate given above how much TDS you have to pay, let us understand this as an example according to income slab rate of 2020-21 –
Suppose your annual income is Rs 10,00,000 and you do not have any kind of loan nor do you have any other income, then according to the income slab rate 2020-21, you are forgiven tax up to Rs 2,50,000. Taxable income is Rs.10,00,000-Rs 2,50,000 = Rs. 7,50,000, now you only have to pay your tax on Rs 7,50,000
Also Read: Income Tax returns: Banks, Post Offices can now check your ITR to deduct TDS
From the above example you must have understood that out of your Rs 7,50,000 taxable income, you have to pay 5% tax on the first Rs 5,00,000 and 10% tax on the remaining 2,50,000 and both of which will be your tax. You also have to pay 4% education and health cess, so in this way you will get Rs.10,00,000 annually but you will have to pay Rs 3, 250 tax every month or your TDS will be deducted.
What is TDS refund policy?
If your annual salary does not come under the income tax or if your TDS is deducted more than your income tax,
So by filing ITR, you can inform the Income Tax Department about this, while filing ITR, there will be a TDS column in it, where you can give all the information about your TDS, and you can deduct additional TDS Can get your refund,
If your income tax refund comes late and your refund is 10% more than your tax, then 6% per year interest will be paid by the Income Tax Department, for example if you have petitioned for refund in 2019-20 and you will get 2020. If you receive a refund in March of 21, then you will receive interest on your refund from April 2019 to March 2020.
Note: You will get 6% per annum interest on income tax refund only if your refund is more than 10% of your paid tax.
If your annual salary does not come under the income tax, then you can also inform the company about this by filling the 15G / 15H form, then the company will not deduct your TDS and if your TDS is deducted by the company, then you file ITR.
